On Sunday, firearms maker Remington Outdoor Co. filed for Chapter 11 bankruptcy. The U.S. Bankruptcy Court located in Delaware posted the filing on its website.
Remington is amongst the oldest gun makers in the U.S. and last month said it had entered into a deal with its lenders that granted them ownership of the company, which is 200 years old. Remington would continue operations as well as make guns during bankruptcy.
The Wall Street Journal, which first reported the filing, said that Remington’s bankruptcy is due to high debt, dropping sales and lawsuits that are tied to the school shooting in Sandy Hook.
With close to $1 billion in total debt, Remington announced it made a plan for debt restructuring on February 12, two days prior to the Parkland, Florida mass shooting.
Since that time, some retailers have reacted. Amongst them: Dick’s Sporting Goods is banning sales of assault rifles while Walmart increased the minimum age to buy guns to 21 from 18.
People who are familiar with the situation told the WSJ that that the filing of the bankruptcy had been delayed due to the Parkland shooting.
Remington, as noted by the Associated Press, is the maker of the Bushmaster AR-15-style firearm that was used during the Connecticut shooting at Sandy Hook that killed 20 first-grade students and six school employees in 2012. Remington was cleared of any wrongdoing in that shooting, but the incident caused investors to distance themselves from the owner of the company Cerberus Capital Management.
Overall gun sales have declined since President Donald Trump was elected, as buyers believe that new regulations for gun control would not be as likely. Sales of guns had gone up during President Barack Obama’s two terms as well.
American Outdoor Brands, known by the name Smith & Wesson until 2016, saw profits drop by 90% during 2017. Sturm Ruger last October posted a decline of 35% in its quarterly profits.
Sturm Ruger’s CEO Christopher Killoy during a talk with analysts in 2017 spoke about the rise of gun sales during the presidential race in 2016 only to see them fall following the election of Trump.
Killoy said that strong demand was experienced industry wide for almost all of 2016. However, he added that following Trump’s election and through his first year in office, Sturm Ruger has seen its customers take a breather from buying.